If you are lucky enough to win on an REO bid, be prepared for a roller coaster ride until it’s done, and expect a headache during the process. Oh, I guess I’m talking about the headaches a Realtor receives, not necessarily what you, the buyer gets, that is, besides a great buy. REO’s are wonderful for First Time Buyers but remember to hang on during the process!
We’re in the middle of one right now. Our clients are getting a steal of a deal on a 3 bedroom 2 1/2 bath home. Wow, a great deal and a place that is generally in good shape. But, here’s what it’s like to be in the middle of one of these deals. No matter what your contract says, forget it. It doesn’t really matter because the bank holds all of the cards.
We asked for a 45 day close but by the time all of the documents were signed – a 2 week process – it’s down to 31 days. We hope the lender will perform, and I have been assured they will, but that’s a headache especially for me. Banks get snarly in their side of the agreement if you are one minute late in closing. They charge lots of money, even if it’s their delay. So be prepared for the roller coaster ride as we crawl up the track.
In a normal sale, the buyer has more protections in the contact than the seller. Not so in an REO. The bank rules. But, we are not complaining. We got the bank to pay all closing costs and pay down points, and this is worth a lot of money to a buyer. In return my buyers will get a fabulous new home under current market value.
But the clock still ticks. It’s been over two weeks and the escrow has not been opened up. Reason? It’s not a local title and escrow company. It’s well out of our area and market and doesn’t do business the way it is done in San Mateo County. That’s another headache and a pause while we crawl the tracks on this roller coaster.
The lender needs a Preliminary Title Report. I need it too, and so does the buyer. It’s not been ordered, yet. The clock ticks. Headache time. We have contingencies to release. They are stipulated within the original contract and the number of days we have is there, too. But that’s not the agreement we’re under right now, so what clock are we on? Roller coaster here — we’re climbing up, up, up waiting to hit the top of the track so we can release contingencies on time, or better yet sooner. That way when we’re at the top of the track, the ride down will be smooth and easy for my buyer.
I am confident that we’ll get to the end of the ride on time, and without too many stops along the way, but it’s sometimes a wild ride getting to the close of escrow. Oh, First Time Buyers, this is not the usual process in buying a home, which is generally cut and dry. But roller coasters can be fun and REO roller coasters are well worth the run.